Can an Affiliate Live Off Amazon’s Low Commission Rates?

When new affiliates are looking for networks where they can promote something, Amazon is without a doubt either the top choice or somewhere at the top, but when they hear that they have low commission rates (4%-15%), that’s enough to make them give up and think there’s no way they’ll ever be able to live of that.

I have seen many new affiliates ask this question over and over again regarding Amazon, that within their niche topic, they can’t promote anything other than low cost items and they won’t earn them anything. Many of these people have become very discouraged because of that and it’s cost them potentially incredible websites they may have had if they just didn’t think so narrowly!

So for anyone who doubts Amazon’s potential and/or has a website where they feel they won’t get paid anything if they promote products from that network, I’m going to prove it’s not true.

Did you happen to notice a very important phrase I said…

So far, every time I have used the word affiliate, I have put the word “new” in front of it. It’s people who are new who get caught into thinking they will never succeed with Amazon. But they are the people who only see this opportunity from 1 angle:

They typically have niche websites which they think can only sell low cost items like books. Most books indeed are very cheap, especially eBooks and many of them are either free or at most, you may end up paying around $40.

At 4%, you can see how little one would earn from just 1 sale. Even taking an expensive book for $40, 4% would make them $1.60 so do these people have a point in it not being worth it? They do, but NOT if you see it from my point of view!

Note: If your niche site sells expensive things you can find on Amazon, obviously, your commission rate is going to be high, but this article is for people whose products are low cost.

Why you CAN make a living promoting on Amazon:

Let’s assume that you, the affiliate has a niche website.

Let’s also assume that you know how to get traffic to your website.

And finally, let’s assume that you think your only option to sell stuff on your site are things from Amazon only and they cost very little and obviously they’ll give you a small commission too.

Out of those 3 things, I would only omit the last one and tell you to focus on the niche and traffic, because you’re not seeing the potential you already have:

Niche websites and the traffic you can get to them are enough to live of. What you promote on the site is where you have a ton of flexibility.

But too many people focus and worry about how they’ll be able to make good money when they only see small commissions. Fine, let’s debunk that right now:

You may only see 4% earnings per sale but I see much more and I’ll show you:

Let us look at the person whose niche site sells books (specific things like horror, finance, dieting, ect…). Regardless of which book niche you’re involved with, the fact is, most of them aren’t expensive and your commission rates aren’t going to be high either. I used the $40 example into the $1.60 commission so we’ll go with that…

1) What you may not know is that 4% isn’t the only percent you earn.

More sales increase your earning percentage, all the way up to 15%. That $1.60 per sale can become a $6 per sale if it hits the 15%. What will determine that? Oh that’s right, your traffic!

If you have 100 visitors hitting your site every month, and let’s say only 5 of them (5%) buy the book you’re selling, you’re not going to hit that 15%, you’re going to remain at the lowest one and only make $8.

However, if you really focus on building traffic, especially through these methods, you can raise that traffic to a 1,000 a month in which case a 5% conversion would mean 50 sales. Now on Amazon, you need to make somewhere around 10 sales before you’re moved into the next commission tier so I don’t know if 50 would get you to the 15%, but for sure, it would make you more than the original $6 a month and if it didn’t, then you’d just have to keep building the traffic.

If you went from 100 visits to a 1,000, why can’t that number rise to 10,000? I know from the sites I make that it can. Then with a 5%, what was once 5 sales, went to 50 and here it would be 500. Now for SURE you’d be in the 15% and I estimate you’d make a couple of $1,000.

2) You know you can promote on something other than Amazon products right?

Here’s some other great networks and just know, you can be registered with multiple ones. You may find that book you saw on Amazon might pay more if you promoted it on another network, but do keep in mind that not all networks have that commission upgrade after you make more sales so you have to decide which would make more money.

Also I used tip 2 before to earn far more (see how much) than if I were to promote exclusively with Amazon. In this particular scenario, it made more sense for me to go with a different network for promoting stuff. It may not be the case for your site, but just understand that it’s OK to promote products from other networks.

For example: I had a casewhere I found a product being advertised on televised networks, but it didn’t have an affiliate program so I couldn’t promote it. No problem! I just went to other networks that did have affiliate programs, found one that was relevant to the televised product and promoted it instead.

3) Are you absolutely sure you can only promote 1 thing on 1 kind of network?

Within internet marketing, affiliates have a lot more options than they think when it comes to product promotions and ways to generate profits. Besides just promoting books like in our example, what else could you do?

Well in this article, I wrote about 5 different options and in the case of books, I would have used every option except number 3.

I would mainly do affiliate marketing and get my sales numbers up, but then I’d expand into collecting an email list, and maybe write my own book to then sell to people. Then you wouldn’t have to worry about restrictive rates and make your own checkout cart OR you could have sold it on Amazon as a vendor and if enough sales came about, you might have landed on the best seller list and then made even more.

We’re still just talking about books here, probably the most popular example where people think they can’t make enough money, but it’s not true.

And another thing people who promote books can do is interviews with the author and collaborate to help them make more sales.

4) Why not expand and make another niche website?

The same idea where if you know how to increase traffic to a site works here too. If it works for 1 subject, why not make another? Yes it’s going to be more work and there are problems there, but another niche site can promote things that typically cost more and earn you more and it can increase your income and yes it can be from Amazon.

I though about adding this into point 3 because it was relevant for that but currently I have 1 active site where it’s promoting both Amazon and another network’s products.

5) Consider that you have different niche choices with different products in them too.

Some of them could be high ticket ones like these. A small percentage in commissions? Yes. But that’s still a ton of money in spite of that!

My final thoughts:

In most examples, a niche site that typically can “only” sell low cost products from say Amazon might be limited in making a big income, BUT the limit isn’t really going to come from the product’s low commission, but the TRAFFIC the site gets and if you increase that, as I said before, you increase the income.

As you saw above, the more traffic a site that sells books gets, the more the income multiplies and that’s why I said out of the those 3 things, that what your products commission rate is isn’t that important (because traffic is more important and you can sell more than just 1 type or product).

Not to mention that even if you take the least expensive products, know that in niche sites, you can sell products that are related to them. Example:

Pens. Why not sell expensive pens? Why not sell accessories that have ink and things like cleaning supplies. There’s people out there that love to have fancy pens and you can probably only find them all on Amazon.

I will admit, some products will be limiting on your overall income, but again, your main profit factor is niche traffic. And then with it, I’ve shown you different ways you can promote of them, through and without Amazon.

I do believe, even at worst, an affiliate can make a great side income from Amazon alone and in many cases, a full time one as well, but even in cases, where they can’t, just supplement it with the other options I’ve provided you.

Comments

Great review on how to make an income out of amazon, I also was one of those people being discouraged seeing the low percentage commission amazon was giving, however now I’m thinking maybe I should have giving it a little more though to it.

I did find some other affiliate networks with higher percentage commission though, but for future businesses I will definitely give it another go at amazon, your article is very well explained and encouraging.

Very interesting Vitaliy. I never knew that your commissions could rise like that with more sales on Amazon. To be totally honest, the low commissions was one of the reasons I started looking for affiliate companies with higher ticket offers, I never really gave Amazon the time perhaps it deserves. Thanks!

I would not abandon the program right away Iain, even if you don’t directly promote anything from there, you may find more than one product you can review on your site to pitch another program you are affiliated with that’s outside Amazon.

Very well spoken, amazon’s percentage may be small in comparison to other sites, but it’s not what you sell, it’s how much traffic you have buying. Thank you so much for this very informative post, I think I might take your advice to heart and rework my Amazon sites, focusing on traffic than product.

Saying that you’re ranked on the first page can mean a lot of different things Richard, you could be ranked #1 for a keyword few people type or it could be a term no one types in which case it won’t bring much traffic.

What I would suggest is that you should continue your blogging and attain many more high rankings, this will build up your daily traffic and improve your sales to possibly even happen daily.

Its my understanding that Amazon’s affiliate link earns you a commission on purchases of other goods your customer may make within 24 hours after you have referred them to Amazon. Therefore the customer may use the referral link to view a $10 book, but then purchase something a lot more expensive. This must happen quite frequently I’d imagine, and increases your commissions quite a bit.

That is correct Ray. In fact, today I saw that one of my sites that sells Amazon products made a few sales for products which I don’t even promote and it happened because they clicked on the link I was providing, but then decided to buy a different product, but it still earned me the commission anyway. This doesn’t happen often, at least not on my website.

I viewed your writing regarding Amazon and their commission pay out. So what you’re saying is that affiliates can’t live off the percentage Amazon offers?

What I think, and me being an affiliate a well, if you hustles your butt off, those smaller percentage pay outs could add up! Something is better than nothing. Don’t you think that’s right?? (And I know niche selection and traffic plays a big part as well.)

I am reminded again that getting traffic is so very important. No traffic, no business. Only when you do have traffic, you have the chance to convert and earn money. As my website product is in the same price range as your example (books) and commissions are relatively low as with Amazon, I am heartened to read that you still can make a good living of it, always on the premise that you have lots of traffic. I am glad to see that you also offer solutions to increase that. Cheers, Jerry

I love Amazon and am definitely using it in my website, but was also unsure how the revenue would increase with such a low commission. I had no idea that the commission rate changes with more sales! That is awesome!

I agree with you 100% that it is based on traffic! If you simply focus on gaining traffic and writing quality content, the sales will come.